You probably remember the online outrage over the Stop Online Piracy Act (SOPA) copyright enforcement proposal. Last week, the Department of Commerce's Internet Policy Task Force released a report on digital copyright policy that endorsed one piece of the controversial proposal: making the streaming of copyrighted works a felony.

I don't think it is possible for a Government of the size of the USA to be rotten to the core. It is simply impossible. The recent Snowden leaks are proof of this. There is always someone with enough backbone to actually do this. The economical affect could be profound (10% of cloud computing customers have moved their business from the USA already due to the leaks).

The reality is and this would be apparent to anyone that has ever watched the wire or worked in a large organisation.

There are so many conflicting interests in large organisations by higher up individuals, that an overall big brother is impossible (it was even impossible in Nazi Germany and Stalinist Russia).

Everyone envisages a one man with a vision of everything ... it simply isn't possible for one (very) busy man to keep and make a decision about everything and he delegates decisions to those below him.

You rightfully reason "rotten to the core" doesn't/can't really exist. You wrongly ascribe the reason for it to the size of the US or other large organizations due to competing interests.
Consider now instead, the difference between your
"rotten to the core" and "rotten at the core".

An apple that is "rotten to the core" is overtly rotten from the outer peel all the way through to its core. There is no mistaking it being rotten even at first glance.

An apple that is only "rotten at the core" still has a clean and shinny outward appearance. Only after close inspection is the rot revealed.

All evil intention is necessarily disguised behind the cleanest facade the perpetrators can muster. This is true in all, evil, agenda driven human endeavors, be they a pedophile lurking near a playground with a box of puppies and a bag of candy intent on rape , torture and murder, or a company's claim that their walled garden is there purely to protect its users and not being about vendor lock-in, vertical integration and ultimate monopoly, or governments removing civil liberties "for the children" or necessary to prevent terrorism and having nothing to do with moving incrementally towards effective, total ownership and control of its population and ultimately the world. That if terrorism wasn't real they would create it if need be to further their ultimate aims.

There is no need for one puppet-master to call all the shots. All that is needed is a pyramidal hierarchical structure with a few well positioned like minded individuals(fellow travelers) at each level of the structure.
In world events, the American president is but a task-master for the real powers that be and a long way from the apex of world power.

There is no need for one puppet-master to call all the shots. All that is needed is a pyramidal hierarchical structure with a few well positioned like minded individuals(fellow travelers) at each level of the structure.
In world events, the American president is but a task-master for the real powers that be and a long way from the apex of world power.

It would still be just as implausible though. Of course, there are some corrupt people in positions of power, but if there were a group of them hellbent on world domination, AND across multiple administrations and party lines, it would be damn hard to keep that a secret. And even assuming they could keep it a secret (which in itself is highly unlikely) any group of individuals that hungry for power would probably never cooperate with each other. Instead, they would most likely destroy each other, like the Sith did in Star Wars.

I think it's the system that corrupts people - likely without them even realising it. In the same way that a group of individually decent people is capable of pretty heinous and shocking acts. It's only when they get detached from that group and face their actions that they realise what they've done.

The problem is that the current system encourages people not to question their actions because you get less punishment if you get caught and can shift the blame elsewhere than if you blow the whistle. And if compliance is the expected behaviour in your group/society, then it will eventually turn you into a compliant person as well in that position.

Excuses are usually like:
"It's an order from above."
"I had received wrong information."
"My job is to represent my shareholders/clients."

Often all of this is true. Obama is mainly getting his information from established groups/people such as lobbyists who simply represent their client and do not care about the public because that is not their job. Surely these established groups have more experience in this field and have more authority than the general public and hence should be taken more seriously? I think it's pretty similar to the Milgram experiment.

Then throw in some actually evil people and you get a very rotten system.

So if you want to fix the system, then start by making it more attractive to blow the whistle than to cover your ass by shifting the blame. That way you encourage people to think for themselves again. Unfortunately it's a self-sustaining system as most people aren't interested (anymore) in more responsibility.